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enTracking contactless - how Visa and Mastercard are planning for a COVID-19 bump for hands-free digital commercehttps://diginomica.com/tracking-contactless-how-visa-and-mastercard-are-planning-covid-19-bump-hands-free-digital-commerce
<span class="field field--name-title field--type-string field--label-hidden">Tracking contactless - how Visa and Mastercard are planning for a COVID-19 bump for hands-free digital commerce</span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/slauchlan" class="username">Stuart Lauchlan</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Fri, 06/05/2020 - 04:09</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/tracking-contactless-how-visa-and-mastercard-are-planning-covid-19-bump-hands-free-digital-commerce" data-a2a-title="Tracking contactless - how Visa and Mastercard are planning for a COVID-19 bump for hands-free digital commerce"><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
If COVID-19 results in greater adoption of contactless payment tech, there could be CX benefits for digital commerce overall. Visa and Mastercard are ready to tap into the opportunity.
</dd>
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<figcaption>(PIxabay)</figcaption>
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<p>Payment card giants Visa and Mastercard anticipate that COVID-19 will accelerate adoption of contactless payment tech, potentially addressing the to-date somewhat laggardly uptake in the US. It’s a shift that could be crucial for merchants and buyers in terms of kickstarting a post-pandemic recessionary economy.</p>
<p><a href="https://backend.diginomica.com/covid-19-catalyst-tapping-contactless-payment-revolution-us">As noted in Chris Middleton’s previous article</a>, contactless payment has been in far greater use in Europe than in the US, but the public health implications of handling hard cash may well be the wake-up call needed for consumers and merchants to ditch the dollar bills and the check books in favor of something ‘cleaner’.</p>
<p>It’s certainly on the radar of the major card issues, with Visa CEO Al Kelly commenting this week at the Piper Sandler Global Exchange & FinTech Conference :</p>
<blockquote><p>One of the really positive movements related to what's happened with COVID-19 is that people are seeing cash as something that carries germs and we've seen numerous merchants actually say, ‘Hey, I don't want to pay cash’. So I think it's going to accelerate the adoption of tap to pay in the United States.</p>
</blockquote>
<p>And there’s a lot of room for catch-up, he adds, noting that in 12 countries around the world over 90% of Visa’s transactions are contactless, while in 50 countries, more than 50% of the face-to-face transactions are:</p>
<blockquote><p>It's the most frictionless way to pay in a face-to-face environment for both the consumer and the seller or the merchants. It has really become a default in many parts of the world. The US is much further behind, but gaining momentum> We have just about 200 million cards in the United States now that are enabled for tap-to-pay [Visa’s term for contactless]. It is the most in the world by the way. We hope to have 300 million enabled by the end of this calendar year, but that's still only a third of the 900 million credit, debit cards that are in the United States.</p>
</blockquote>
<p>At Mastercard, there’s a similar worldview that the pandemic will act as a catalyst that might be regarded as overdue. Speaking to the MoffettNathanson Payments, Processors and IT Services Summit, Craig Vosburg, Mastercard Head of North America, reckons:</p>
<blockquote><p>Contactless has been an important theme for us as a company for many years and obviously has had much greater success in penetrating payments volumes in markets outside the US. Inside the US, it's been more of a challenge to create the adoption around contactless, but it's been no less of a priority for us to be an enabler of that. We've been working with issuers to get them, to recognize the benefits of contactless and begin to reissue cards with contactless capability. In light of current events, a number of them are accelerating the re-issuance of contactless cards to get them into the hands of consumers more quickly. We've been working on the merchant side to work with acquirers and individual merchants to ensure the contactless capable terminals are available at the point of sale.</p>
</blockquote>
<p>Vosburg believes COVID-19 is going to have a massive impact, dubbing it “the most forceful catalyst we could have imagined” for changing consumer behavior. This, in turn, changes merchant strategic approaches:</p>
<blockquote><p>Suddenly nobody wants to touch anything that they don't know, recognize, trust, haven't cleaned, and that includes terminals, that includes pens, that includes who's working on the other side of the counter. Nobody wants to touch anything. Therefore, as a catalyst for changing consumer behavior, we're seeing a very significant uptake in consumers embracing contactless as a way to pay, we’re seeing merchants encouraging consumers to use contactless payments.</p>
<p>We're seeing growth on the order of 40% in contactless transactions worldwide. We're seeing similar rates of growth in the US and while it's off a very low base as a starting point…I believe long before COVID, that we were finally at a point where the US was on its way to becoming a contactless market. I believe that even more today and we'll get there sooner because of the circumstances we're in with COVID.</p>
</blockquote>
<p>On the downside, ongoing public health concerns will inevitably still come into play as more organizations trial contactless capabilities, according to Jack Forestell, Visa’s Chief Product Officer, at the Bank of America Securities 2020 Global Technology Conference:</p>
<blockquote><p>If you think of contactless transaction like a consumer product, you’ve got to get people to try it and then you’ve got to get them to repeat it. With a product like this one, where you’ve got to try it in physical space, with other people around - there's someone on the other side of the checkouts, there's people behind you in line - there’s a little bit of apprehension there.</p>
</blockquote>
<p>But overall, the benefits are clearly going to outweigh any lingering concerns:</p>
<blockquote><p>I think what's happening here is those apprehensions are just being obliterated by COVID. I actually have heard stories of other shoppers kind of pointing out to people that they could use contactless because their cards has been enabled.</p>
</blockquote>
<p>And sellers want this shift as well, in Forestell’s assessment:</p>
<blockquote><p>There's certainly movement happening here. We can see it in our own numbers. I actually see it in my text messages. I have had so many people take pictures from around the world where sellers have put together signage that says, ‘Please use contactless’…When merchants put up that little bit of encouragement, we start to see the contactless transaction rates popping.</p>
</blockquote>
<h2>Better CX</h2>
<p>Leaving the public health implications to one side, a shift to contactless tech also provides financial services providers and retail merchants with a better customer experience to Vosburg’s mind:</p>
<blockquote><p>It's smooth. It's easy. It's seamless. It's quick. You pull out a card, you tap it, you put it away and you're on your way. It is a very good consumer experience. In this day and age of technology and the evolution of technology, you need to continue to deliver a great consumer experience to ensure someone else doesn't figure out a way to deliver a better consumer experience than you can.</p>
<p>This is an evolution for our industry in providing a great consumer experience. It was a great experience to go from cash or writing a check to using the card; it was a great experience for the cards to go from being those paper-based ‘zip-zap’ things to being electronic; it’s a great experience for the card to go from being electronic and you have to sign for us; now you just tap and you go, and that it's just an evolution of that path.</p>
</blockquote>
<p>And that CX improvement is critical to the wider digital commerce experience, which Forestell finds lacking in its current form:</p>
<blockquote><p>It's too complicated for consumers. It results in too many bad outcomes, high shopping cart abandonment, too many failed transactions, too much fraud. The click-to-pay solution is really designed to streamline the whole consumer experience by offering a stronger security tokenization, improved transaction success rate and ultimately, better outcomes for the consumer and more sales on the merchant side.</p>
</blockquote>
<h2>My take</h2>
<p>I’ve always been surprised on visits to the US how tech-enabled financial transactions in shops, bars, cafes etc appeared to lag in terms of adoption and capability compared to Europe. I can’t recall how long ago it was since I personally had a check book. And tapping to pay in a shop has been standard practice for me long before it became a public health convenience in recent months. Driving uptake of contactless payment in the US could be another of those ‘unintended silver linings’ that we’re starting to isolate out of the pandemic crisis as we inch towards the re-opening of shops and other businesses. And any knock-on improvements to the wider digital commerce experience as Visa’s Forestell alludes to, would be hugely welcome.</p>
<p> </p>
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<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - Pixabay </em>
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<div class="field field--name-field-category node__categories categories">
<span class="categories__label">Read more on: </span> <ul class="categories__list">
<li class="categories__item"><a href="https://diginomica.com/category/retail/e-commerce" hreflang="en">e-commerce</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/ux-application-design/user-experience" hreflang="en">User experience</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/crm-customer-experience" hreflang="en">CRM and customer experience</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/financial-services/fintech" hreflang="en">Fintech</a></li>
</ul>
</div>
Fri, 05 Jun 2020 11:09:55 +0000Stuart Lauchlan22318 at https://diginomica.comIs COVID-19 the catalyst for tapping into a contactless payment revolution in the US? https://diginomica.com/covid-19-catalyst-tapping-contactless-payment-revolution-us
<span class="field field--name-title field--type-string field--label-hidden">Is COVID-19 the catalyst for tapping into a contactless payment revolution in the US? </span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/cmiddleton" class="username">Chris Middleton</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Fri, 06/05/2020 - 03:51</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/covid-19-catalyst-tapping-contactless-payment-revolution-us" data-a2a-title="Is COVID-19 the catalyst for tapping into a contactless payment revolution in the US? "><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
Contactless payments are a good idea in the middle of a global public health crisis, but some countries are more ready to take advantage than others.
</dd>
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<figcaption>(Pixabay)</figcaption>
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<p>There’s a change of payment culture happening on the back of lockdown.</p>
<p>COVID-19 has impacted businesses large and small, but organizations face particular challenges as one crisis is set to be replaced - or augmented - by another in the form of a likely deep, protracted recession. Factor in consumer nerves, soaring unemployment, supply chain uncertainty, and spiralling debt – albeit at low interest rates – and it’s clear that many businesses, large and small, will be in the market for new fintech ideas.</p>
<p>In that respect, payments tech is a core space to watch as businesses, the self-employed, and customers seek low-friction means of paying for goods and services when cash may no longer be a desirable - or healthy - option for any enterprise, while SMBs and contractors are looking for convenient ways to accept payments at the lowest possible cost.</p>
<p>In the payments space, global Q1 volumes and funding fell back quarter on quarter, to $2.4 billion across 76 deals, from $3.8 billion and $104 billion in Q4 2019, according to data from research house CB Insights. However, the total value of venture capital-backed deals was still nearly $500 million higher than in the same quarter last year, from significantly fewer wins. This suggests that, despite the virus, this space is consolidating fast and payments technologies are still attracting big money.</p>
<p>Platforms such as PayPal, Visa, MasterCard, and American Express, among others, have of course been serial investors in payments startups, especially over the past two years. For example, Visa paid $5.3 billion for Plaid in Q1, while secure payments services provider Worldline forked out even more for the Ingenico Group: $8.6 billion.</p>
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<figcaption>(Source: CB Insights - Where The Biggest Payment Players Are Investing In Private Markets)</figcaption>
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<h2>US lags behind</h2>
<p>In many ways, it’s easy to assume America dominates in fintech. For example, CB Insights found multi-million-dollar fintech startups booming in 35 US states – 70% of the country – rather than just in technology hotspots, like California and Texas, or financial centers, such as New York. That throws down a massive challenge to the other global fintech leader, the UK, where investment has grown by 500% in the past three years according to data from recruitment firm Roger Walters and market analysis experts Vacancy Soft. That’s a hefty growth rate, but mostly centred on London.</p>
<p>Nonetheless, contactless payments is one area where the US lags behind the UK, Europe, and Asia. While US merchants can accept much bigger sums via the technology, trust has generally been low and uptake slow. The popular culture of ‘tap and pay’ has simply not taken root in a country where paper money and traditional cards are still king and swipe terminals often demand a signature.</p>
<p>In contrast, figures out this week in the UK from UK Finance, an association representing over 250 banking and financial services firms, revealed that 80%`of people made a contactless purchase in 2019, up from 69% the year before. That is, of course, pre COVID-19, which is likely to prompt a further uptick. UK Finance chief executive Stephen Jones says:</p>
<blockquote><p>An increase in ways to pay coupled with the change in people's payment habits may have inadvertently gone some way to prepare the nation for the impact of coronavirus on their daily lives. With consumers already using contactless payments and remote banking more than in previous years, these technological advances have allowed many people to shop and make payments safely from home or in store. The impact of Coronavirus may accelerate these habits for many customers.</p>
</blockquote>
<p>But could that market balance be about to change? Research published on Researchandmarkets.com in April forecast that the US contactless payment market will grow at a compound annual growth rate (CAGR) of 16% over the next five years. As well as the potential COVID-19 impact, uptake will be driven by the likes of Walmart going contactless with its self-checkout system for Walmart Pay, while mobile payments such as Apple Pay are increasingly popular across industry sectors.</p>
<p>But those forecasts – drawn up before the virus’ real impact was felt – are likely to be an underestimate, thanks to the crisis itself. A recent US survey from specialist analytics and consulting firm The Strawhecker Group (TSG) has found 27% of US SMBs reporting an increase in contactless payments, both from credit/debit cards and mobile solutions, such as Apple Pay.</p>
<p>Brad Hyett is CEO of UK mobile payments startup, Phos. Its technology turns Android phones into contactless terminals, both as a white-label solution for banks and payment services providers, and as an own-brand option. He reckons that COVID-19 has forced the US to catch up fast and enable contactless technology:</p>
<blockquote><p>Everyone was expecting contactless acceptance to start moving the needle in about two years’ time in the US. So it needed Bank of America to start issuing contactless cards, [along with] Wells Fargo and other large banks. But we've seen that two-year development compressed into about two months. I've got lots of colleagues in the US who are posting about contactless payments and letters that they've received from Bank of America saying they're going to be replacing their cards with ones that have contactless technology, which is great to see. But America is a vast place and it will take time. But it will definitely happen a lot quicker now because of COVID-19.</p>
</blockquote>
<p>Phos is certainly using the crisis to promote its contactless tech with an SMB focus, offering some companies a time-limited free service to help ease them into the cashless world at a time of great financial uncertainty. The company clinched a $1.4 million funding round (out of $3 million to date in total) in Bulgaria just as COVID-19 hit Europe – Hyett reportedly jumped on the last plane out of Sofia as the country entered lockdown.</p>
<p>As to the firm's focus on Android, Hyett explains that it’s a problem facing all companies in the mobile and contactless payments space.</p>
<blockquote><p>There are two things you need for the solution to work. One is wireless remote access to the secure environment on the device, and the other is remote access to the NFC antenna on the mobile. Apple currently blocks both of those in all regions, apart from Germany, where they've been made to give third-party access to the NFC antenna, but not to the security environment of the device. If Apple were to do that, then we would certainly be looking to develop an iOS version. But we don't expect them to. Personally, I think they will launch something of their own. But everything that Apple does around payments is always US-driven.</p>
</blockquote>
<p>And what's happening in the US market is another matter...</p>
<h2>My take</h2>
<p>Contactless payments are an attractive option for SMBs and their customers – from couriers, on-demand transport providers, and pizza delivery drivers, to retailers, builders, plumbers, contractors, and anyone else who might once have been keen to minimise their costs by accepting cash.</p>
<p>However, the challenge remains the extent to which digitally-excluded customers and the unbanked may find themselves living in a cashless society by default, perhaps locked out from being able to pay for some goods and services – conceivably on their own doorsteps. Might contactless payment cards – including from specialist providers such as Phos – be those consumers’ route into the digital world?</p>
<p><a href="https://backend.diginomica.com/tracking-contactless-how-visa-and-mastercard-are-planning-covid-19-bump-hands-free-digital-commerce">Meanwhile the likes of Visa and Mastercard have their own mass market contactless ambitions in play, for businesses of all sizes as seen here. </a></p>
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<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - Pixabay </em>
</p>
<div class="field field--name-field-category node__categories categories">
<span class="categories__label">Read more on: </span> <ul class="categories__list">
<li class="categories__item"><a href="https://diginomica.com/category/retail/e-commerce" hreflang="en">e-commerce</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/ux-application-design/user-experience" hreflang="en">User experience</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/financial-services/fintech" hreflang="en">Fintech</a></li>
</ul>
</div>
Fri, 05 Jun 2020 10:51:19 +0000Chris Middleton22317 at https://diginomica.comPegaWorld Inspire 2020 - One Digital vision delivers premium transformation for Aflac's customer centricityhttps://diginomica.com/pegaworld-inspire-2020-one-digital-vision-delivers-premium-transformation-aflacs-customer
<span class="field field--name-title field--type-string field--label-hidden">PegaWorld Inspire 2020 - One Digital vision delivers premium transformation for Aflac's customer centricity</span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/slauchlan" class="username">Stuart Lauchlan</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Thu, 06/04/2020 - 07:53</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/pegaworld-inspire-2020-one-digital-vision-delivers-premium-transformation-aflacs-customer" data-a2a-title="PegaWorld Inspire 2020 - One Digital vision delivers premium transformation for Aflac's customer centricity"><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
US insurance provider Aflac is 6 years into a customer-centric digital transformation program. Rich Gilbert, Chief Information and Digital Officer, highlights progress to date.
</dd>
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<figcaption>(Pegaworld Inspire 2020 )</figcaption>
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<p>Founded in 1955, Aflac is an American insurance company and is the largest provider of supplemental insurance in the US with over 50 million customers worldwide. Six years ago it kicked off a digital transformation program to re-invent the way it engages with customers, policyholders, agents and brokers, centering on a corporate vision called One Digital Aflac. </p>
<p>Since 2014, the nature of that transformation has evolved, according to Rich Gilbert, Chief Digital and Information Officer: </p>
<blockquote><p>It was focused on technology for technology's sake, things like data center optimization and implementing service buses. We were building the first data warehouses, and we were doing things like ripping and replacing policy admin systems. Fast forward to today and in 2020 the digital model has shifted. It's no longer about working on technology-centric things; it's all around focusing on customer centric things. We had to re-think our customer expectations around things like ease [of use], around value, around service. </p>
</blockquote>
<p>The digital component of digital transformation, he concedes, means different things to different people: </p>
<blockquote><p>When I think about digital, I think about my cell phone. This device has helped me transact and do things easier and as a customer, it's changed the way I expect companies to engage with me. We realized that digital, at its core, is all around using technology to make things easier. So when we launched our One Digital Aflac vision, we said, 'Let's use that as our first tenet. Let's use technology to make things easier. Let's use technology to make it easier for our customers to be able to buy and interact with us. Let's make it easier for our sales teams to sell in the marketplace and run successful businesses. Let's make it easier for our employees who work at Aflac to do what they do every day. And overall, make it easier for us to fulfil our promise'. </p>
</blockquote>
<p>And all of this had to be built on customer centricity, he adds: </p>
<blockquote><p>In the past, we'd focused on technology centric items and today we've had to shift to be customer centric. We're looking at everything from the lens of the customer, back. We've changed our prioritization model to do just that. If it's not driving value for the customer, it doesn't get prioritized. </p>
</blockquote>
<h2>Digital operating model </h2>
<p>Turning the vision into reality meant creating a new operating model to support the strategy, explains Gilbert:</p>
<blockquote><p>What we're trying to do is put the customer first, drive value quickly with tangible results and do all of that while maintaining core stability for our business. So we thought about [what] is the best way to organize your technology team? We thought about that and said, 'It all comes down to business services'. And if you think about the services that make up an insurance business, we looked at what those are. Things like how do we enable our agents and how do we enrol new policyholders? How do we do things like file claims and process claims? How do we facilitate billing and payment and how do we support all of that through a contact center? </p>
</blockquote>
<p>With those services in mind, the technology operating model has been re-designed as a digital services operating model, he says. This has involved three main planks: </p>
<blockquote><p>It's not just about IT; it's about bringing the business teams together with the technology teams. What we've been able to do is prioritize everything through the lens of the customer, We've done that by taking the product owner from the business and said, ' You represent the customer'. Make sure you put the customer first in our experience. It's really the linchpin to our customer-centric model. </p>
<p>The second thing we've had to do in delivering our vision is be able to deliver with speed, so we've implemented Agile. Everybody knows Agile is about taking these large programs, break them into smaller deliverables and run into two week sprints, where we can deliver value quickly and easily. So we put agile as part of our delivery model. </p>
<p>The third thing is all around changing out our fundamental technologies to make it easier for our customers to be able to interact with us and for our business to run. It's all around changing out those technology platforms that support your business. Pega has been a key enabler for our business strategy...a platform for our platform. It's allowed us to rip and replace older inefficient legacy systems and replace them with processes that are more efficient, flexible, and give us the ability to gain speed, gain quality in our operations, be able to drive insights faster, and most importantly, it's given us improved customer experience. </p>
</blockquote>
<p>To illustrate how this works in practice, Gilbert points to some key use cases: </p>
<blockquote><p>We pride ourselves on two key areas. The first is paying claims timely and efficiently; the second is all around providing excellent customer service. Those are the key business drivers. If you think about the claims experience, the customer journey focuses on how they start to access our platform. We did an analysis and we found our customers really struggled with using our web and mobile platform. They couldn't remember something simple things - they couldn't remember their user ID, they couldn't remember their password, they couldn't remember the policy number. </p>
<p>Now if you contrast that with, for example, banking, most of us check our banking app once a week, once a day and if you're trading stocks in today's environment, you're checking, 3, 4 or 5 times a day. So you're using your applications, very frequently. In insurance, it's very different. You might use your app and log on to your mobile application maybe four times a year. As a result, customers were trying to access our systems and they were having a hard time doing that. </p>
</blockquote>
<p>This realization has resulted in the creation of a guest checkout facility, using Pega’s platform to overhaul the claims process, explains Gilbert: </p>
<blockquote><p>Now policyholders don't have to know their user ID, their password or their policy number to file a claim. When they log in or they come to our system, all they have to do is be able to provide is a few pieces of information. We will take that information, correlate that with their policyholder and their policy number, and be able to file a claim on their behalf. The guest's checkout experience has transformed how we do claims processing and enhances our digital experience by (1) making it easier for our customer, (2) providing a self service capability, which would otherwise result in a call to our call center, and (3) leveraging automation to correlate customer information with our claims. With this new ability we've now processed thousands of claims for policyholders using this guest checkout. </p>
</blockquote>
<p>Once a claim is filed, customer attention then turns to the status of that claim: </p>
<blockquote><p>What we did is we looked at the industry and we said, ‘Who does this really well?'. If you look at shipping companies, they track packages extremely well and tell you the location of a package throughout the entire journey. We said, 'Let's apply that to claims'. So we simply put together a claims tracker that tracks the status [of a claim] to know whether it's been submitted, whether the documentation has been processed, whether the claim has been adjudicated, and whether the claim has been paid. </p>
</blockquote>
<h2>Transformative</h2>
<p>None of this is particularly ‘rocket science’ in some industries, but there are hugely transformative in the insurance sector, states Gilbert: </p>
<blockquote><p>They change the way the insurance team works. Those technologies become game changers for us. We've been able to optimize our customer experience using Pega, but these things also support our internal operations. Once we've submitted a claim using our guest checkout and having the ability to check the status, then it goes through a back end workflow. Our back end workflow was highly manual. It was a process that took us a while to be able to proceed through and it was complicated. </p>
<p>What we were able to do is use our Pega workflow engine to be able to optimize the workflow, to be able to streamline things for our employees. We've been able to optimize how a claim has been processed. We've been able to deploy automation that optimizes the whole process end-to-end, and doing all of that while providing improved visibility as that claim proceeds through that workflow.</p>
</blockquote>
<p>The transformation extends to customer service, he adds: </p>
<blockquote><p>We've used Pega to create a whole new contact center that we're calling PAVE - Prioritizing, Automating, Valuing and Experience. It's really about, how do we transform our customer experience through a contact center?. We took the Pega platform, and our Agile delivery model, and we married those together and said, 'Let's put value into the market quickly'. The first thing we wanted to tackle is live chat. We were able to put together a model where, in just a few simple sprints, we had chat going across one line of business. Then COVID-19 hit and we were able to scale chat across all of our lines of business within just in a few weeks….We wanted to take this and continue to build on the Agile model and deliver more value. So we took chat and we married it with our automation to be able to create chat bots. We focused on our Top 15 high volume requests that come in to the call center. By putting in chat bots, we were able to resolve 86% of these 15 request types, with a containment rate of 61%. </p>
</blockquote>
<p>It’s been a learning experience overall, says Gilbert, with a few bumps in the road: </p>
<blockquote><p>I'll be candid - putting in those new technologies took time and we did experience challenges. When you do implement new platforms, take the time to do change management and training. When we first rolled out our claims workflow, it was difficult. People struggled with it and they had a hard time using it….even though they're better quicker, easier technologies, [users] had difficulty learning those new technologies and there was a learn learning curve associated with that. So one lesson is, make sure you take the time to train your new employees in the technologies. Don't assume immediate adoption, especially if you're going from a legacy platform and process to a new process. It takes time to adapt and become proficient. </p>
<p>The second thing is when you implement a new technology platform, you have to invest in your people. You have to invest in the technology capabilities. Around that we've trained people we've hired people. Our Aflac Northern Ireland site, we've dedicated that to Pega. We've hired 32 people, we've trained them, they've become certified in Pega and they have been instrumental in helping us continue to build our practice. So as you think about implementing new technologies, make sure you're doing the right investments in your people, as well as, as well as investing in change management.</p>
</blockquote>
</div>
<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - Pegaworld Inspire 2020 </em>
</p>
<p class="field field--name-field-disclosure field--type-string-long field--label-inline">
<em>Disclosure - Gilbert took part in the Pegaworld Inspire 2020 virtual conference. </em>
</p>
<div class="field field--name-field-category node__categories categories">
<span class="categories__label">Read more on: </span> <ul class="categories__list">
<li class="categories__item"><a href="https://diginomica.com/category/ux-application-design/user-experience" hreflang="en">User experience</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/crm-customer-experience" hreflang="en">CRM and customer experience</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/financial-services" hreflang="en">Financial services and fintech</a></li>
</ul>
</div>
Thu, 04 Jun 2020 14:53:39 +0000Stuart Lauchlan22314 at https://diginomica.comCOVID-19 and changed organizational IT priorities - three CIOs explain how their companies tech teams have respondedhttps://diginomica.com/covid-19-and-changed-organizational-it-priorities-three-cios-explain-how-their-companies-tech-teams
<span class="field field--name-title field--type-string field--label-hidden">COVID-19 and changed organizational IT priorities - three CIOs explain how their companies tech teams have responded</span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/slauchlan" class="username">Stuart Lauchlan</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Tue, 06/02/2020 - 04:45</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/covid-19-and-changed-organizational-it-priorities-three-cios-explain-how-their-companies-tech-teams" data-a2a-title="COVID-19 and changed organizational IT priorities - three CIOs explain how their companies tech teams have responded"><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
IT teams have had to respond rapidly to the organizational demands of the COVID-19 crisis - three perspectives from three business CIOs.
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<p>If you would have told me several months ago that COVID-19 was going to be the new champion of accelerating the digital agenda, I'd think you crazy, but today that's the reality.</p>
</blockquote>
<p>So says Paul Chapman, CIO at cloud collaboration firm Box, looking back at the past few months and how he and his tech team have been called upon to respond to the global pandemic. It’s been a time of learnings, he adds, for some organizations more than others: </p>
<blockquote><p>The key thing is that I've seen a lot of organizations or spoken to a lot of organisations that are somewhat nervous. They've not grown up in what you would call a ‘work from anywhere’ style and some organizations are struggling with transition over others. You can't speed up the culture of an organization. You can roll out technology maybe faster. The pace is interesting…You have to be careful about speed over perfection. Speed is one thing, but you have to make sure that you don't introduce any security risks, so it's sort of combining those two things together I think is extremely important at this time.</p>
</blockquote>
<p>Box is fortune to have been ‘born in the cloud’, he adds, growing up a digital company:</p>
<blockquote><p>Our ethos has always been that our services don't discriminate between any single location. We're a distributed organization globally, but work is more of a state of mind, not a place. So culturally we were tuned to working in a sort of any place, anywhere, any time way. So the actual shift to working remote from a technology standpoint was not such a big one. </p>
</blockquote>
<p>That’s not to say there haven’t been challenges, he admits: </p>
<blockquote><p>We needed to make sure we had a little bit more of a distributed VPN and a couple of things around the network edge, and some third party service providers, but in the most part we shifted to working remotely very seamlessly. Of course we saw all platforms that support communication and exchange go through a dramatic increase in usage, whether that's video chat, collaboration and so on. It's been quite fascinating to see the metrics of usage. At Box, where we can see the movement of content all over the world, millions and millions and millions of files, we can actually see the changing pattern of the work day, a lot of very interesting data that that's emerging. </p>
</blockquote>
<h2>Security paradigm</h2>
<p>An uptick in attempted hostile security activity has also been a concern that has had to be tackled head-on and has led to some altered priorities, he adds:</p>
<blockquote><p>We have seen a significant uptick in COVID-19 malware attacks, using bogus news articles, malicious emails, fake real time COVID-19 update maps, all these types of things. Bad actors are trying to figure out ways to go after vulnerabilities, so we keep very close attention on the numbers and the metrics of what's going on underneath the covers. We're looking at accelerating and bringing forward some things in and around some security areas and some some areas around our user experience and things like that.</p>
<p>From an actual Corporate Services standpoint, obviously now we're looking more at services that integrate with video, with chat services, whether that's remote collaboration software for white-boarding, developing code, things like that, looking at things that integrate with services like video, to do translation or transcripts of conversations, things that are going to integrate with these services now which we're living by. Anything that provides a service to support the communication fabric of the organisation, like video, chat, content collaboration and so on, those are the areas we're going to go after.</p>
</blockquote>
<p>Cyber-security <em>is</em> “the new working paradigm”, agrees Michael Santiago CIO /VP IT, Cytiva, (formerly part of GE Healthcare Life Sciences), a global provider of technologies and services that advance and accelerate the development and manufacture of therapeutics:</p>
<blockquote><p>For sure, the attack surface for a potential attacker is definitely increased, tenfold, a hundredfold. It now extends beyond the office, beyond the manufacturing plant and into the home office. Security awareness and security vigilance is of utmost importance now. Social engineering is on the rise and getting worse and cyber state attacks are on the rise as well.</p>
<p>We have regular security awareness training that goes out to all associates. It's part of our credit crisis management plan. We also have, on our intranet, security awareness bulletins. People on a daily basis make sure that cyber-security is part of their daily life. We do daily scanning of all of our endpoints. We have incident response teams that are global and ready to respond whenever necessary. But most vulnerabilities are due to humans and not necessarily intentional or malicious, just someone clicking on the wrong thing at the wrong time. So security awareness is really important and something that we are really emphasising.</p>
</blockquote>
<p>For Cytiva, the timing of the crisis has been such that it came just as the firm was purchased by Danaher Corporation, a move that had already triggered tech changes:</p>
<blockquote><p>We've had to transition over 40 sites globally from GE to Danaher. Obviously that includes a lot of equipment, not only infrastructure equipment, but also end user devices, PCs that are localized, regionalized for particular geographies, mobile devices, routers, switches etc. All of that is impacted by supply chain, by our vendors, and even our vendors vendors. And you know, we're not the only company that's that's out trying to buy in 10,000 PCs. Everyone else is also trying to stock up and the demand for them is quite overwhelming. </p>
<p>So we've been very flexible and agile in how we transition these sites. Obviously these sites are all over the globe and they have their own shelter in place guidelines from their own local governments, so we've had to adjust accordingly. When can we travel? Can we travel even to do discovery work to identify what's needed to do the transition? So it's been quite overwhelming. I think the trick here, not only for the site transition, but in general, is to be flexible. We're pivoting every day, priorities are changing every day and that's also how we're responding to supply chain.</p>
</blockquote>
<h2>Speeding up</h2>
<p>At London-based fintech firm Finastra, the timing has been more serendipitous, suggests CIO Russ Soper: </p>
<blockquote><p>We were in the midst of implementing some improved collaboration tools and [working from home] just drove adoption through the roof pretty quickly. So from a silver lining perspective, it was probably the easiest rollout we've ever had do, with some new video capability and chatting capability and all kinds of collaboration tools. People have really gravitated towards that. </p>
<p>From a speeding up of our strategy perspective, we were born in the cloud, so that's certainly a big part of our strategy. For over two years now, we are digital everything and cloud everything, so this has sped that up from our products, our services. We have some on prem services [and] even the way we support those [has changed], doing them in a more distributed and online fashion. I would say [there's been a] heavy shift towards being focused on improved collaboration tools, video, everything. Trying to see people's faces is important, whether it's the sales process, the internal working team process. Video everything, digital everything and cloud everything would be the three pillars of what we really tried to do and and how we work internally, and how we deliver our services and maintain a global workforce.</p>
</blockquote>
<p>Even in a crisis, there’s a need to find ROI in tech strategy, he adds:</p>
<blockquote><p>We really do two three things - we build software, we host financial services for clients and we sell IT. Those are the three things. So from a technology perspective, [we are] really looking at those three processes and understanding, given the the changing world we're living in, how do we best enable those services in the most effective way, with technology, in the most cost efficient efficient way. So, the sales example. Traditionally in a sales cycle, very travel-oriented sales people would be on the road throughout the year. They fly to clients. They sit down. They build a relationship. They do a sales pitch in person. They may install something on the clients premise or we may host it, but there's a lot of personal interaction. That's all changed. </p>
<p>So how do we facilitate that from a technology perspective? Clearly there’s funding and investment that goes with that, but we would offset it with the reduced travel and other things, trying to re-direct funding into the most pragmatic way. Looking into development, finance has a large population of software developers, previously a mix of on site and Centers of Excellence around the world, maybe some remote, but predominantly on site. Now it's 98%,99% off site and remote working from home. Some areas were fairly smooth transitions, where we already had people who were technically savvy, so they could they could make that transition. </p>
</blockquote>
<p>But as with Box, there were still challenges with the shift to remote : </p>
<blockquote><p>When you get into the day-to-day working, as they're doing large scale file transfers or other things that they may do throughout their course their day, those things take orders of magnitude more time, if it's going back and forth from their house, particularly in certain countries around the world. So how do we facilitate that? How do we facilitate BYOD? How do we improve our perimeter security, now that our entire workforce is working remotely? It continues to be an effort of understanding what are the business processes, where we spend our money today? The foundation is understanding how money is spent, whether you want to call it cost containment or demand management, different terms I think for different processes. But the first step is really having absolute clarity on where you're spending your money and are you getting value for that spend? Then you can align that against the shifting environment you're working in and we've had a big shift in the last 60, 90 days and understanding where you need to re-direct accordingly.</p>
</blockquote>
<p>That means modifying future plans in some cases, he says, but the crisis response has also validated existing assumptions: </p>
<blockquote><p>This event has made us re-think some aspects of it, particularly around the workplace the future, but it's also reinforced a lot of what we were already focused on. {We’re] saying, ‘How can we do this quicker, whether it be digital tools and collaboration and video cloud adoption of our products?’…It has sped up a lot of our existing strategies and reinforced them, maybe shifted a few, but looking at where we're investing money and making sure it's aligned to those future state strategies - around mobility, cloud everything, digital everything - is really the key.</p>
</blockquote>
</div>
<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - via Pixabay </em>
</p>
<p class="field field--name-field-disclosure field--type-string-long field--label-inline">
<em>Disclosure - Chapman, Santiago and Soper took part in Everbridge's Coronavirus: The Road to Recovery summit. </em>
</p>
<div class="field field--name-field-tags field--type-entity-reference field--label-inline">
<div class="field__label">Tags</div>
<div class="field__items">
<div class="field__item"><a href="https://diginomica.com/tags/coronavirus" hreflang="en">Coronavirus</a></div>
<div class="field__item"><a href="https://diginomica.com/tags/covid-19" hreflang="en">COVID-19</a></div>
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<div class="field field--name-field-category node__categories categories">
<span class="categories__label">Read more on: </span> <ul class="categories__list">
<li class="categories__item"><a href="https://diginomica.com/category/hcm-hr-future-work/future-of-work" hreflang="en">Future of work</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/iot/machine-intelligence-ai" hreflang="en">Machine intelligence and AI</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/governance/security" hreflang="en">Security</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/collaboration" hreflang="en">Collaboration sharing and digital productivity</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/cloud-platforms" hreflang="en">Cloud platforms - infrastructure and architecture</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/financial-services/fintech" hreflang="en">Fintech</a></li>
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Tue, 02 Jun 2020 11:45:34 +0000Stuart Lauchlan22298 at https://diginomica.comNordic bank DNB ASA centralises IT data with ServiceNow to reduce risk and boost compliance https://diginomica.com/nordic-bank-dnb-asa-centralises-it-data-servicenow-reduce-risk-and-boost-compliance
<span class="field field--name-title field--type-string field--label-hidden">Nordic bank DNB ASA centralises IT data with ServiceNow to reduce risk and boost compliance </span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/ddpreez" class="username">Derek du Preez</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Thu, 05/21/2020 - 06:17</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/nordic-bank-dnb-asa-centralises-it-data-servicenow-reduce-risk-and-boost-compliance" data-a2a-title="Nordic bank DNB ASA centralises IT data with ServiceNow to reduce risk and boost compliance "><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
DNB ASA hopes that the use of ServiceNow across IT will result in better credit and risk scores, meaning it has to keep less in financial reserves. <br />
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<figcaption>(Image sourced via DNB ASA website)</figcaption>
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<p dir="ltr"><a href="https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=2ahUKEwj2qKz1hcXpAhWUSsAKHRaRCJIQFjAAegQIAhAB&url=https%3A%2F%2Fwww.dnb.no%2Fen%2Fcorporate-and-institutions&usg=AOvVaw1O70aREhZPyhMFj-06y8zZ">DNB ASA</a> is the largest financial institution in the Nordic region, with combined assets of more than NOK 1.9 trillion (USD$190 billion). The bank prides itself on its digital capabilities - where, for example, if you are a Norwegian citizen and apply for a loan, the whole process is digital, automated and can be approved in minutes.</p>
<p>However, this level of digital maturity, combined with the need for banks to bolster their risk and compliance regimes post-2008, means that DNB ASA needs to have stringent IT governance structures in place. With approximately €500 million IT costs every year, 1,200 IT internal staff, as well as up to 1,000 external IT consultants, you can imagine this isn't a simple task.</p>
<p dir="ltr">To tackle this and reduce its IT risk exposure, DNB ASA is standardising on ServiceNow as its CMDB, using modules out of the box wherever possible - allowing it to gain better insight into its systems and process, whilst reducing manual intervention and an over-reliance on spreadsheets.</p>
<p dir="ltr">We got the chance to speak to Anne Kristine Næss, enterprise architect at DNB ASA, about the bank's continuing shift to ServiceNow and the impact its having on the organisation's risk profile.</p>
<p dir="ltr">Our conversation forms part of ServiceNow's virtual event Knowledge 2020, <a href="https://knowledge.servicenow.com/?campid=25683&cid=ps:blogpostk20:diginomica:all:emea">which you can access here</a>. To check out all of diginomica's coverage from Knowledge 2020, you can access our <a href="https://diginomica.com/virtual-event/knowledge-2020">dedicated resource hub here</a>.</p>
<p>Næss explained how she was brought on board at the beginning of last year to build on the bank's implementation of ServiceNow, which started in 2017. The initial use case was to use the Now platform to boost system monitoring and reduce downtime of applications. She said:</p>
<blockquote><p dir="ltr">We've bought almost all the modules from ServiceNow, apart from the HR module. The important reason for doing so is to have a unified database. There's so much data that we share across so many people, and there's such enormous amounts of money at risk for just the IT dimension of this. And if we are to have separate tools for the governance processes, that would increase our complexity to such a degree that I'm not sure we could keep on delivering economically efficient services anymore.</p>
<p dir="ltr">We also have all these internal and external audits, because of all the laws and regulations for this, so we have to provide lots of reports and materials all the time, stating that we have things in order.</p>
<p dir="ltr">I joined in 2017 because DNB had important customer facing services that were down for long periods of time, which happened several times every month. The first part was to get on board change, process, as well as incident, problem and monitoring.</p>
<p dir="ltr">Once we had done this, the fact that we needed the complete database was the next big issue. So we also bought discovery, so that we could automate the building of the CMDB.</p>
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<h2 dir="ltr">Data is the key</h2>
<p dir="ltr">DNB ASA is now using ServiceNow to execute on areas such as software asset management, as well as managing IT financials. On the former, Næss explained that given the size of DNB's IT estate, licensing can cause a huge amount of extra cost for the bank. Using ServiceNow it is able to track how many active users it has, monitor licensing, as well as do vulnerability scans across all of its equipment. This is helping to reduce the burden and cost of manual administration, but also, again, reduce the risk for the organisation.</p>
<p dir="ltr">The key part of this, though, is getting away from the use of Excel spreadsheets and having a centralised data model for IT. Næss explained:</p>
<blockquote><p dir="ltr">Previous vendors relied a lot on Excel. But part of doing the transition was to make sure that the Excel information was transferred to our CMDB. And also that the teams were using the monitoring tools to test the data. Data is the most important factor. What we are seeing now with the risk process is that we use the same data there. We have risk profiles added to our business applications in the bank and we also relate the risks to the organisation dimensions - all the system users, all the department structures are present in ServiceNow.</p>
<p dir="ltr">All of this is a major business case for us, both in terms of security and economically.</p>
</blockquote>
<p dir="ltr">Whilst using ServiceNow as the bank's CMDB for IT, Næss said that wherever possible she is encouraging the use of modules as they come - out of the box. She provided an example of a previous IT financials project which hadn't followed this guidance and as a result was missing out on new functionality. Næss said:</p>
<blockquote><p dir="ltr">One of my major responsibilities is to make sure that we have tried out of the box first before we do any kind of tweaking. The project I'm spending the most time on right now is IT financials. The previous project ended up creating a lot of stuff on their own, which is sad because if they had spent the time correctly we would have come so much further and could have used so much of the good, new things coming from the latest ServiceNow releases.</p>
<p dir="ltr">We are a team of architects making sure we are the watchdogs for all the other projects and implementation teams, to make sure that the out of the box version is the best practice set up.</p>
</blockquote>
<h2 dir="ltr">Benefits</h2>
<p dir="ltr">Næss said that the benefits of using ServiceNow across IT have been "huge". And given the benefits that have been realised already, DNB ASA is considering extending the use of the platform outside of IT across the group to broaden the management of risk.</p>
<p dir="ltr">DNB ASA is also hoping that this superior approach to risk management, which doesn't rely on Excel, means that the bank can reduce the reserves it is legally required to hold in case things go wrong - by boosting its credit and risk scores. Næss said:</p>
<blockquote><p dir="ltr">The cost of downtime on customer facing solutions is not easy to count, but we might have lost fewer customers...to put it that way. We also have reduced the staffing on the change management team, because the process is easier to handle on ServiceNow. Also, for the risk processes and the governance processes that have been using manual labour from Excel spreadsheets. We have had lots of expensive external consultants from Accenture and such to cover these areas, so we have been able to cut down the costs of that.</p>
<p dir="ltr">Also, based on our credit score and our risk score with some external auditors, we have to retain a certain amount yearly. That's some percent of our yearly revenue we have to store in case we have a catastrophe - that money could be spent much more wisely. Now that we have better processes in place, it makes it possible to gain a higher score on that scale and reduce the amount of money we have to set aside for bad days.</p>
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<p class="field field--name-field-disclosure field--type-string-long field--label-inline">
<em>Disclosure - ServiceNow is a diginomica premier partner at time of writing. </em>
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<div class="field field--name-field-category node__categories categories">
<span class="categories__label">Read more on: </span> <ul class="categories__list">
<li class="categories__item"><a href="https://diginomica.com/category/governance/security" hreflang="en">Security</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/financial-services" hreflang="en">Financial services and fintech</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/digital-enterprise/use-cases" hreflang="en">Use cases</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/it-as-a-service/it-service-management" hreflang="en">IT service management</a></li>
</ul>
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<div class="field field--name-field-virtual-event field--type-entity-reference field--label-inline">
<div class="field__label">Related to the virtual event</div>
<div class="field__item"><a href="https://diginomica.com/virtual-event/knowledge-2020" hreflang="en">Knowledge 2020</a></div>
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Thu, 21 May 2020 13:17:31 +0000Derek du Preez22254 at https://diginomica.comThe future of digital payments - has COVID-19 become a weapon in the war on cash?https://diginomica.com/future-digital-payments-has-covid-19-become-weapon-war-cash
<span class="field field--name-title field--type-string field--label-hidden">The future of digital payments - has COVID-19 become a weapon in the war on cash?</span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/cmiddleton" class="username">Chris Middleton</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Wed, 05/20/2020 - 02:13</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/future-digital-payments-has-covid-19-become-weapon-war-cash" data-a2a-title="The future of digital payments - has COVID-19 become a weapon in the war on cash?"><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
If COVID-19 has made people wary of touching hard coinage and paper money, has the virus become an inadvertent weapon in the war on cash as the future of digital payments is fought out?
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<p>COVID-19 has created a fear of touching cash and forced a greater shift towards digital payment methods, a development that could be a silver lining to the crisis for a small number of technology providers.</p>
<p>So what are the consequences for a society in which those companies could now find themselves in powerful, quasi-monopolistic positions, while a centuries-old medium of fair exchange, cash, is regarded with suspicion?</p>
<p>In short, if money is a social convention, what happens if that social convention changes?</p>
<p>The World Health Organization (WHO) has been partly blamed in some quarters for the fear of touching hard cash, claims Natalie Ceeney, CBE, Chair of the UK’s Access to Cash Review and of Innovate Finance. Yet this isn’t strictly true. Early in the pandemic, it was reported by some newspapers that the WHO had said that the virus can be spread via coins and notes. But in March, the organization issued a clarification:</p>
<blockquote><p>WHO did NOT say banknotes would transmit COVID-19, nor have we issued any warnings or statements about this. We were asked if we thought banknotes could transmit COVID-19 and we said you should wash your hands after handling money, especially if handling or eating food.</p>
</blockquote>
<p>In other words, good hygiene practice is important, but cash is no more intrinsically dangerous than a parcel, a door handle, or an item in a supermarket. Even so, months of lockdown and closed shops, pubs, restaurants, and cafes have pushed people towards using digital payments online and contactless payments in physical stores.</p>
<p>(This shift also prompted uncharacteristic speed in decision-making. In the UK, the contactless limit was raised to £45 at the start of April – a move waved through in just a fortnight by payments providers and regulators, whereas previous negotiations took many years.)</p>
<h2>Left behinds</h2>
<p>Of course, the supposed benefits of this come with the assumption that consumers aren’t unbanked or digitally excluded, both inherently significant risks for any society that is moving towards being cashless.</p>
<p>According to 2018 figures from the UK Office of National Statistics figures, 5.3 million people – roughly 10% of the adult population in Britain – either lacked internet access or did not use online services, while Pew Research Center comes up with the same percentage for the US.</p>
<p>Meanwhile, the British government’s Financial Inclusion Report 2018-19 revealed that 1.23 million adults remain unbanked, while 14.1 million US adults have the same unfortunate status, according to the Federal Deposit Insurance Corporation.</p>
<p>Cash remains king for those people and for anyone lacking in digital skills, or living in areas of poor network coverage or scant local amenities – problems that may be accentuated if people are forced out of rented accommodation and onto the street.</p>
<p>Yet the global shift towards digital payments and fulfilment clearly stands to benefit providers such as MasterCard and Visa; a fact acknowledged by Sonia Brown, Executive Director of UK Government Engagement and Regulatory Affairs at Visa:</p>
<blockquote><p>We've all been observing the marked transition from cash towards digital payments in recent weeks, which in many ways is great to see. But we need to be more mindful than ever about what consumers care about.</p>
</blockquote>
<p>So what do they care about? Brown says of recent consumer research:</p>
<blockquote><p>It was overwhelmingly clear that three factors are at the heart of what drives consumer behaviour: security, convenience, and inclusivity. The vast majority of consumers identified the prevention of fraud as their top priority….The COVID-19 pandemic has only placed an even sharper focus on these priorities.</p>
</blockquote>
<p>Arguing that Visa works hard not to take its position for granted, she adds, perhaps with more than a hint of grandstanding:</p>
<blockquote><p>We are aggressively monitoring activity using global data sets to analyse and authorise transactions in milliseconds. Security and reliability have always been the bedrock of what we do. To ensure that we can operate without any interruption, Visa’s infrastructure in the UK can route to multiple data centres around the world with instant failover capabilities, which contribute to best-in-class operational resilience. Visa deploys some of the industry's most sophisticated cyber-security tools.</p>
</blockquote>
<h2>War on cash?</h2>
<p>Fair comment or an organization too pleased with itself? Mark Falcon is an anti-trust economist, whose organization Zephyre is co-leading a review of UK payment systems. He says</p>
<blockquote><p>Unlike lending, savings, or insurance, payments are driven by network effects. A two-sided market, like a phone call: every payment always has two customers. This means that the value of the payment method depends on how widely it can be used by how many others. This makes payments essentially a network utility, just like telecoms and other regulated utilities. But this often gets forgotten.</p>
<p>The economics of payment systems are very different from those of other financial services, and the network effect means that payment systems have a tendency towards a natural monopoly or at best, indirect competition. This is why the UK government established the Payment Systems Regulator [PSR] as a utility regulator. [In establishing the PSR] the government highlighted the problem of anti-competitive and inefficient wholesale pricing and payments markets. Again, this has the analog of access pricing in telecoms networks, such as wholesale pricing in broadband, but the importance of payments gets forgotten.</p>
<p>As of last week, Visa and MasterCard are now the largest financial services firms in the world. Larger each than any bank, behind only the largest tech giants, with a combined market capitalisation of a billion dollars, just short of Google. That's what happens to unregulated platform businesses, they make very large profits.</p>
</blockquote>
<p>In Falcon’s view, there <em>is</em> a war on cash and regulators have, to date, failed to intervene sufficiently in the market – conceivably due to the need to keep the economy ticking over in the lockdown:</p>
<blockquote><p>One particular concern is the current scheme’s war on cash. This is effectively a war on the most vulnerable consumers and businesses, especially at the current time with the impact of the pandemic. </p>
<p><a href="https://www.accesstocash.org.uk">The Access to Cash review</a> rightly called for a guarantee on access to cash and an obligation on banks to provide suitable cash access to their customers. But, in my view, the Access to Cash panel was wrong to say that UK regulators have no legal powers to require banks to give their customers appropriate access to cash, and shops the ability to deposit cash. This is wrong because Parliament gave the PSR express powers.</p>
<p>It’s not right to say that the demise of cash is purely a matter of customer demand, that customers simply choose to use it less. It's also a matter of supply. The industry has a strong incentive to accelerate the demise of cash.”</p>
</blockquote>
<h2>My take</h2>
<p>These issues can only be accentuated by moves in some parts of the world towards establishing national digital currencies – and by some companies, such as Facebook with its Libra concept, to establish stablecoins that could become either proxy digital dollars or mediums of global transaction linked to invisible networks of advertising partners.</p>
<p>Professor Alistair Milne, Professor of Financial Economics at Loughborough University, acknowledged that there is a competition problem in the market, quoting McKinsey figures which suggested that global payments were worth $1.9 trillion in 2018: 2.2% of global GDP.</p>
<p>As Milne explains it, with a conventional settlement, there is a transfer of reserves, whereas in what he called “atomic settlement”, the transfer of reserves <i>is</i> the payment. This will need far greater attention in the UK’s New Payments Architecture (NPA).</p>
<p>With many of us now relying on Visa, MasterCard, and other platforms, such as PayPal, the growing power of a handful of companies in allowing us to continue buying goods and services must be examined anew, once the crisis has passed.</p>
<p>Until then – as with many other areas of our lives – we must be cautious about some elements of the lockdown becoming permanently embedded in our behavior, without consideration of the consequences.</p>
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<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - Pixabay</em>
</p>
<p class="field field--name-field-disclosure field--type-string-long field--label-inline">
<em>Disclosure - Brown, Ceeney, Falcon and Milne spoke at a Westminster eForum conference on digital payments this week. </em>
</p>
<div class="field field--name-field-tags field--type-entity-reference field--label-inline">
<div class="field__label">Tags</div>
<div class="field__items">
<div class="field__item"><a href="https://diginomica.com/tags/coronavirus" hreflang="en">Coronavirus</a></div>
<div class="field__item"><a href="https://diginomica.com/tags/covid-19" hreflang="en">COVID-19</a></div>
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<div class="field field--name-field-category node__categories categories">
<span class="categories__label">Read more on: </span> <ul class="categories__list">
<li class="categories__item"><a href="https://diginomica.com/category/retail/e-commerce" hreflang="en">e-commerce</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/ux-application-design/user-experience" hreflang="en">User experience</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/governance/regulation" hreflang="en">Regulation</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/financial-services" hreflang="en">Financial services and fintech</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/financial-services/fintech" hreflang="en">Fintech</a></li>
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Wed, 20 May 2020 09:13:36 +0000Chris Middleton22241 at https://diginomica.comRBS drops its Bó 'Monzo-killer' start-up just as COVID-19 drives digital banking uptickhttps://diginomica.com/rbs-drops-its-bo-monzo-killer-start-just-covid-19-drives-digital-banking-uptick
<span class="field field--name-title field--type-string field--label-hidden">RBS drops its Bó 'Monzo-killer' start-up just as COVID-19 drives digital banking uptick</span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/slauchlan" class="username">Stuart Lauchlan</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Tue, 05/05/2020 - 06:57</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/rbs-drops-its-bo-monzo-killer-start-just-covid-19-drives-digital-banking-uptick" data-a2a-title="RBS drops its Bó 'Monzo-killer' start-up just as COVID-19 drives digital banking uptick"><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
RBS had grand plans for a Monzo rival, but it's now pulled the plug on this particular digital ambition.
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<p>The decision by the Royal Bank of Scotland (RBS) to pull the plug on its £100 million digital bank only 6 months after launch looks to be a combination of poor execution and bad timing.</p>
<p>The smartphone bank, Bó, was RBS’s bid to develop a competitor to the likes of Monzo, launched after a reported attempt to buy its way into the sector by acquiring that online-only brand. It launched last November on Apple and Google’s app stores attracted around 11,000 users. But to put that into context, those users were mostly of the ‘family and friends’ variety while Monzo’s total sign-ups is heading north of 4 million.</p>
<p>So the decision to shutter the standalone business and merge it into RBS’s digital business offering Mettle came less as a surprise than the termination of a short-lived project that began under a previous management team. The current RBS CEO Alison Rose confirmed:</p>
<p>After careful consideration, we have decided to merge our personal digital account, Bó with our digital bank for SMEs, Mettle. As a result, we will be winding down Bó to customer-facing brand and technology used in Bó will be integrated as we develop Mettle. We retain the longer-term commitment to reshaping the bank to be fit for the future and driving sustainable success.</p>
<p>Rose insisted that Bó is not regarded as a failure and that “valuable lessons” have been learned:</p>
<blockquote><p>Bó was something that we were testing and learning from.It was launched in the App Store, that we never undertook a consumer launch or introduced any type of acquisition targets.</p>
</blockquote>
<p>She also alluded to the idea that the current pandemic crisis had played a part in the decision with RBS strategy being to focus on core activities given the macro-economic uncertainties:</p>
<blockquote><p>We are prioritising our investment spend across the bank on products and services that allow us to provide the best possible support for customers and colleagues. This is more critical than ever given the challenges we are all facing at this time.</p>
</blockquote>
<h2>Uptick elsewhere</h2>
<p>But other data suggests that the current health crisis is in fact fuelling uptick of online banking offerings as lockdown discourages people from using branches. According to research conducted by fintech firm Nucoro between 14 March and 14 April, 200,000 people downloaded their bank’s app each day, while 22% of people says are using their banking apps more compared to 5% who are using them less.</p>
<p>Overall, the study findings suggest that around 6 million people have made a move to digital banking in recent weeks and in the view of Nikolai Hack, Chief Operating Officer of Nucoro, it’s a habit that won’t be shaken off after the current crisis:</p>
<blockquote><p>A combination of people going out less because of Coronavirus and their finances coming under growing pressure means many people are more worried about bills and money has clearly led to a surge in people downloading their bank’s app for the first time and people generally using them more to keep a closer eye on their finances.</p>
<p>However, once the Coronavirus crisis passes, for many people the way they interact with their banks will have changed permanently. Many are increasingly happy to use apps, so there will be much more digital interaction. This will represent a strong opportunity for banks to improve customer service, reduce costs and cross sell more products and services such as investments and savings to their core banking clients.</p>
</blockquote>
<p>RBS itself has reported seeing new mobile banking customers up by 20% and new online banking customers by 30%. So is the decision to axe Bó a sensible one? The reality is that Bó did not have an easy birth. Back in 2017, RBS considered a bid to take over Monzo, then valued at around £100 million, but when this was thwarted, decided to build its own digital offering to compete.</p>
<p>Things didn’t get off to a good start. Following the launch, Bó was forced to reissue 6,000 debit cards to its customers after failing to comply with the latest EU regulatory requirements on authentication.</p>
<p>The operation has also lost key talent. Mark Bailie, the former RBS Chief Operating Officer who was charged with the project, announced his departure from the organization in January, replaced by Marieke Flament, the CEO of Mettle. Then last month Chief Product Officer Ollie Purdue quit to join venture capital firm Antler.</p>
<h2>My take</h2>
<p>According to its website, the name Bó doesn't have an English meaning and the digital bank was so called:</p>
<blockquote><p>because we like the way it sounds. It's warm and friendly, gentle even…it’s a word that we can own, that will grow with us and become associated with what we're trying to do.</p>
</blockquote>
<p>Depending on your point of view, that’s either rather endearing or possibly indicative of some very wooly thinking that might go some way to explaining what went wrong with Bó which failed to deliver any USP or to stand out from the digital pack.</p>
<p>In contrast, Monzo goes from strength to strength. According to the latest numbers from the Current Account Switch Service, which facilitates account transfers, the last three months of last year saw the challenger bank attract 23,721 new customers, more than any other bank. It’s also now applied for a US banking licence which, if granted, would open up the world’s largest financial market for expansion.</p>
<p>Meanwhile RBS has just announced its profits have been halved…</p>
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<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - via RBS</em>
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<div class="field__item"><a href="https://diginomica.com/tags/coronavirus" hreflang="en">Coronavirus</a></div>
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Tue, 05 May 2020 13:57:46 +0000Stuart Lauchlan22174 at https://diginomica.comCOVID-19 and the small business enterprise - a Deluxe response to changing operational demands https://diginomica.com/covid-19-and-small-business-enterprise-deluxe-response-changing-operational-demands
<span class="field field--name-title field--type-string field--label-hidden">COVID-19 and the small business enterprise - a Deluxe response to changing operational demands </span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/slauchlan" class="username">Stuart Lauchlan</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Tue, 04/21/2020 - 03:02</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/covid-19-and-small-business-enterprise-deluxe-response-changing-operational-demands" data-a2a-title="COVID-19 and the small business enterprise - a Deluxe response to changing operational demands "><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
It's a long time since Deluxe's founder came up with the checkbook, but the firm today is facing up to the challenges of COVID-19 in partnership with the likes of Salesforce.
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<figcaption>(via <a href="http://www.deluxe.com">www.deluxe.com</a> )</figcaption>
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<p>Small business financial services provider Deluxe Corporation is a firm that has had a huge impact on US business and consumer life over the past century and the current COVID-19 pandemic is providing fresh challenges to meet.</p>
<p>Today, 105 years after its founding, the firm provides web marketing thru payroll services to remote deposit capture and integrated receivables for 4.8 million active small business customers and more than 4,600 financial institution clients. But originally Deluxe was a checkbook producer, with founder W.R. Hotchkiss credited as the inventor of the first personal flat-pocket checkbook and holder.</p>
<p>The COVID-19 crisis has inevitably brought enormous pressure to bear on businesses of all sizes, but small and medium enterprises face their own particular challenges. Those types of organization are a large part of the ‘bread and butter’ business for Deluxe and the company is currently trying to support their needs in the current situation.</p>
<p>But it’s also facing up to the need to adjust its own operational practices, as CIO Mike Mathews revealed on a recent Salesforce-hosted online conversation. Given that the company has been around for over a century, it’s ridden out of a lot of storms in its time, but this one isn’t quite the same:</p>
<blockquote><p>We have 6500 employees operating at about 70 locations, mostly domestic and obviously a few international…And as this crisis literally sprang upon us and the world, we found ourselves in this really precarious spot. Unlike the Great Depression, two World Wars, the recession of 2008/2009, this crisis has something of a much bigger and more complicated dimension.</p>
</blockquote>
<p>One of the most obvious of these is the lockdowns that have occurred around the world, requiring non-essential employees not to travel to workplaces and to work from home wherever possible. This posed an immediate challenge to Deluxe as around two-thirds of its workforce were based in offices or non-domestic physical locations. Mathews explained:</p>
<blockquote><p>As the crisis really started to mount, we realised that these shelter-in-place orders were going to be enacted, and that social distancing was ordered, not just in the workplace, but to the point where people couldn't physically get into the office. We've really had to rethink how we are going to operate as a company. We began to think about opening up the aperture of the organization.</p>
<p>As of today, just a few short weeks into the crisis, we have more than 5,500 people working from home. There are about 1000 or so employees who are on the frontlines and who are in our plants and operational centers, where literally the work is tethered to to a production line. But we found a way, even in spite of all the other hurdles, to get the workforce home, because obviously employee and customer safety is paramount for us.</p>
</blockquote>
<p>Achieving this step has resulted in some re-calibrating of established operational thinking, he added, as Deluxe has leant heavily on the Salesforce platform to connect up its teams and to collaborate remotely:</p>
<blockquote><p>There's this belief - and I think many of us probably share this belief, not just inside Deluxe, but probably in companies all around the world - that as these shelter-in-place orders were enacted and as we created social distance and removed ourselves from the office, that connectivity and productivity would actually weaken or lessen. We have found to be that to be exactly the opposite. Our teams, our partners, are working more closely together. We are speaking more frequently. We're engaged more intimately. I think that's because everybody feels compelled to stay engaged.The power of the platforms and their ability to work remotely has actually made us stronger, and we're finding new, better faster ways to do what it is that we do.</p>
</blockquote>
<h2>Small businesses, big needs</h2>
<p>As for that bedrock of small business customers, they too have seen their worldview change substantially in recent weeks and Deluxe has a role to play to help them adjust to the ‘new normal’, said Mathews:</p>
<blockquote><p>The approach that we're taking is we're trying to create some level of normalcy within the company in terms of just the things that we do day-to-day to support our customers. We really adopt a customer-first approach and we've been very honored and privileged to serve 4.5 million small business customers. Small business customers are struggling, and this crisis has hit them in a very fast and unexpected way.</p>
<p>We're doing a lot of things. In addition to trying to keep the company running in its normal state, we're very acutely aware of the impact this is having on our small business customers and we've done a couple things here in recent weeks to take our 105 year learnings, our capabilities and all the knowledge that we have from [Salesforce] and other partners and our own, and make that available [to customers].</p>
<p>So, as an example, we've launched a <a href="https://www.deluxe.com/about/coronavirus/small-business-solutions/">Small Business Solutions Center</a> geared towards helping small businesses figure out how they continue making money and operating, paying and getting paid and treating their customers and employees with care and handling themselves appropriately through this crisis. We've taken all of the learnings that we've had around COVID-19 and made those resources available on yet another site.</p>
</blockquote>
<p>The company has also extended and ramped up its own <a href="https://www.deluxe.com/sbrc/small-business-revolution">online Small Business Revolution program</a>. This is pitched as:</p>
<blockquote><p>a critically-acclaimed series that’s reinvigorating communities, one small business at a time. Each season, Deluxe awards one small town and six of its business a $500,000 revitalization and captures the transformation…Each episode tells the story of one business tackling common challenges with a little help from Deluxe and industry experts.</p>
</blockquote>
<p>It’s all about best practice exemplars, explained Mathews, noting that currently some 650 million people subscribe and participate in the initiative. With the arrival of COVID-19, a further video series has launched, <a href="https://smallbusinessrevolution.org/small-business-revolution/big-hearts/">Small Business, Big Heart</a>, which has as its mission:</p>
<blockquote><p>We’re highlighting the stories of business owners across the country who are creating hope through their generosity, amidst the uncertain times brought on by Coronavirus (COVID-19). In each episode, we tell the story of how these businesses are pivoting their business model and paying it forward, providing inspiration and insights to the small business community.</p>
</blockquote>
<p>It’s all about meeting the needs of small business, a market sector that Deluxe has engaged with since 1915. Mathews expanded:</p>
<blockquote><p>This is about telling the stories of small businesses who are finding ways to succeed and thrive. We find it really inspiring and encouraging for everybody who's facing this crisis. Our love for small businesses is deep and long-rooted and whatever we can do to to help small businesses succeed in this critical time, we're there for them.</p>
</blockquote>
<p>Deluxe has also launched a community forum, built again on Salesforce:</p>
<blockquote><p>We're launching on the Salesforce platform and we're providing live content for Q&A and conversations that can help customers. Whatever market or segment or sector or region they're in, [they can] get answers to those real important questions around how to succeed and thrive and survive in something that we've frankly never seen before.</p>
</blockquote>
<h2>Learnings</h2>
<p>While COVID-19 has triggered an unprecedented situation, and one that is still evolving and has no clear end in sight, Mathews is able to take some positive learnings from the events of recent weeks:</p>
<blockquote><p>Crises unite us in a way that I think most people don't fully appreciate. I think, as we had this crisis thrust upon us like the rest of the world, there were kind of paradigms that were broken and shattered in a matter of nanoseconds. That was around whether or not we could work from home and whether or not we could be strong while separated and could we find new ways to operate, communicate and collaborate? And the answer is yes. We've proven that.</p>
<p>We had a world where we believed that either bodies of work or capabilities had to be done a certain way in a certain location; the crisis of the day would force us to think otherwise. We've proven to ourselves that if we open our thinking and open up the aperture of approach and dig a little deeper to be a little more connected and responsive, we can be successful. We do that in the spirit of making sure that our employees are safe, that our customers are safe and able to succeed and we're taking advantage of all the relationships and partnerships that we have, like with Salesforce. This has been just an incredibly trying time for many and for all and we're just glad that we can do a little bit to help.</p>
</blockquote>
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<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - via www.deluxe.com</em>
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<p class="field field--name-field-disclosure field--type-string-long field--label-inline">
<em>Disclosure - At time of writing, Salesforce is a premier partner of diginomica.</em>
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<div class="field__item"><a href="https://diginomica.com/tags/coronavirus" hreflang="en">Coronavirus</a></div>
<div class="field__item"><a href="https://diginomica.com/tags/covid-19" hreflang="en">COVID-19</a></div>
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<span class="categories__label">Read more on: </span> <ul class="categories__list">
<li class="categories__item"><a href="https://diginomica.com/category/hcm-hr-future-work/future-of-work" hreflang="en">Future of work</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/collaboration/productivity" hreflang="en">Productivity</a></li>
<li class="categories__item"><a href="https://diginomica.com/category/crm-customer-experience" hreflang="en">CRM and customer experience</a></li>
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Tue, 21 Apr 2020 10:02:54 +0000Stuart Lauchlan22106 at https://diginomica.comSmart Data policy and practice - not as smart as legislators think? https://diginomica.com/smart-data-policy-and-practice-not-smart-legislators-think
<span class="field field--name-title field--type-string field--label-hidden">Smart Data policy and practice - not as smart as legislators think? </span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/cmiddleton" class="username">Chris Middleton</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Thu, 04/02/2020 - 03:22</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/smart-data-policy-and-practice-not-smart-legislators-think" data-a2a-title="Smart Data policy and practice - not as smart as legislators think? "><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
A recent Westminster eForum in London on data portability added to debate around Smart Data policy and practice, a topic with global applicability.
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<p>As opening statements go, Tim Jarvis, Director of Consumer and Competition Policy for the UK’s Department for Business, Energy & Industrial Strategy (BEIS), was on message as he pointed to "the biggest health and economic challenge this country has faced in all of our lifetimes".</p>
<p>Jarvis was speaking at a (virtual) Westminster eForum conference this week on the sharing and portability of consumer data, in the wake of the UK Government’s Smart Data Review.</p>
<p>While Jarvis, speaking at a London conference as a member of the British Government, clearly approached his presentation from a UK perspective, the themes under discussion and some of the conclusions reached (or not reached!) have global relevance and bear inclusion in wider international debate around this topic.</p>
<p>For his part, Jarvis was in full reassurance mode, <a href="https://diginomica.com/does-brexit-britain-have-data-strategy-fit-purpose-public-sector-perspective">despite Gaia Marcus, DCMS’ Head of Data Strategy, admitting at a previous eForum</a> that the UK’s data strategy was conceived as a solution to a completely unknown problem:</p>
<blockquote><p>It's important to stress that all the energy and expertise of government is focused on meeting that challenge. Certainly, in my role as Director of Consumer and Competition policy, we have diverted a huge amount of resources to meeting the challenge and addressing some of the concerns we've all got. We are working very closely with the Treasury, which is providing a package of support for businesses. </p>
<p>Clearly, there are going to be lots of challenges for business over the next few years, which I think for some of you begs the question of why we might feel the need to talk about smart data at this time. But it's important to recognise that at some point we will need to move out of this economic situation. Recovery will be important, and one of the key elements of that will be competitive markets. Increased productivity will help the economy recover over time, and I very much see the Open Data initiatives as part of that response.”</p>
</blockquote>
<h2>Smart or not?</h2>
<p>Leaving aside the higher question of whether data itself can ever be ‘smart’ – isn’t it the use that it is put to that is smart or dumb? – this was at least an encouraging statement on the subject of data openness that it would be encouraging to see other nations align with.</p>
<p>However, Martin went on to express the view that it’s in regulated markets where government sees the biggest challenges in terms of data policy. This was another of those significant, but ambiguous asides that has typified so many government presentations of late. The impression that this UK administration - and it’s hard to see its current US counterpart disagreeing - sees all regulation as bad, rather than as means of protecting citizens or trading with partners on mutually agreed terms, is becoming hard to avoid. The drip-feed of coded comment makes it so.</p>
<p>In a far off more innocent time – January – the then UK Chancellor of the Exchequer Sajid Javid felt empowered to make sweeping statements about Brexit Britain being a “rule-maker, not a rule-taker”. In the current situation, such rhetoric seems reckless and absurd, opening the country up to the risk of yet more economic shocks after the Treasury has bailed out the nation from the effects of a killer virus.</p>
<p>More, the government’s knowledge of the markets it seeks to liberate from supposed red tape often seems woefully inadequate – arguably, DCMS’ Marcus admitted as much when she said that the UK’s data strategy was a solution in search of a problem. How many other countries are in a similar position?</p>
<p>Online from his home office, BEIS’ Martin continued:</p>
<blockquote><p>Over the last 20 to 30 years, in terms of the products and services available to consumers, we're still seeing some unsatisfactory output. We might see a lot of choice in lots of ways, but it is quite a complex landscape and very difficult to navigate. And this has led to what some people have referred to as the ‘loyalty penalty’, with people paying large amounts of money for their essential services.</p>
</blockquote>
<p>This might be the first public acknowledgement by a Conservative government’s spokesman that market forces don’t automatically create better and cheaper services for consumers. However, Martin’s point was that it is often harder to switch providers than it ought to be, especially in regulated markets such as the energy sector.</p>
<p>That’s certainly true. But despite the upbeat, on-message presentation of panelist Richard Neudegg, Head of Regulation at uSwitch, that has less to do with a supposed absence of smart data, or of portals that enable consumers to find better deals, and more to do with some companies behaving like mobsters in 1930s Chicago.</p>
<p>It has become commonplace for energy suppliers to entice consumers with misleading offers, then ramp up their direct debits and make it almost impossible to end the relationship quickly, or without paying a hefty penalty. Such gangster-like behaviour may prove harder to sustain in the post-Coronavirus world, in which many livelihoods will have been lost or diminished.</p>
<p>However, Martin was right about the ‘loyalty penalty’. The longer customers stay with any provider – a mobile network, for example – the less competitive their deals tend to become, suggesting that churn is consumers’ best or only weapon in the absence of a smarter market.</p>
<h2>Problem </h2>
<p>But there’s a problem. Constantly surfing a wave of better deals might be ideologically attractive to some, but it is enervating and time-consuming in the real world. It’s boring, and that’s scant reward for our disloyalty. Don’t consumers simply want good service at a fair price, rather than to be constantly shopping for better deals? The notion that all of us want to spend our lives haggling over basic services in some dynamic digital space is a delusion.</p>
<p>After all, doing so also relies on the assumption that a market hasn’t been rigged by the suppliers. Just look at the banking sector and the widespread fraud, mis-selling, and exchange rate fixing scandals – Libor, Forex, and more – that took place for at least a decade and involved nearly every major brand.</p>
<p>Smart Data is all very well as long as a sector isn’t fundamentally corrupt – or cashing in on COVID-19 at the expense of a public that bailed it out for a trillion dollars in 2008-09 and endured a decade of austerity for their pains.</p>
<p>It’s naive to assume such behaviour isn’t endemic in other markets. Last year, for example, <a href="https://www.choose.co.uk/news/2019/bulb-accuse-sse-energy-fixing-price-at-cap/">the UK’s big six energy suppliers were accused of price fixing and using tariff caps as a target, rather than an upper limit</a>. And so it goes on: <a href="https://www.telegraph.co.uk/business/2019/06/20/uk-mobile-phone-operators-accused-attempted-price-fixing-collusion/">take the cellphone market</a>, as another case-in-point.</p>
<p>In such a world, consumers aren’t data-empowered super-shoppers or mobile-wielding data ninjas, they’re rats in a trap – having data sucked out of them so they can be force-fed advertising for the rest of their lives. Pity the buyer in such a digital world.</p>
<p>Yet in Martin’s view, the problem is rooted in data itself. He said:</p>
<blockquote><p>Consumers lack the information and tools to get the best deals. I think it's very difficult for people to navigate these markets. And similarly, when you look at new entrants into these markets, the consumer data that is held by an incumbent is often a barrier, I think, to disruptive newcomers. This is what led us to set up our Smart Data program. UK data protection law gives consumers a right to data portability. Now, the question is, why do we need to do any more than that? And I think it's basically the difference between what we're calling ‘Smart Data’ and the normal advice you get under data protection law. I think first difference is being able to access this data in real time, rather than waiting 30 days and getting historical data. It’s the immediate provision of the data.</p>
<p>And then it’s about the format in which that data is supplied. Is it supplied in a way that’s enabling technologies, such as application programming interfaces [APIs], which developers use to lock into that data and use it to benefit consumers? And it’s not just about personal data. When you're looking at some of these markets, it's the products that you're buying, how you're using the surface, and the products that are available behind that, that are important to understand and the choices that are available. So it's a much wider provision of data.</p>
<p>We also think it’s important, for this to work, for there to be common standards and consumer protections to give people the confidence to operate in these markets. [...] If you have all of these things, then it enables this ongoing real-time transfer and use of data to enable it to work for the consumer. That's ultimately what we mean by Smart Data.”</p>
</blockquote>
<h2>My take</h2>
<p>Fair enough – <em>if</em> consumers want these services, which frankly isn’t clear.</p>
<p>Let’s take an example. With just one million customers of Open Banking, the most mature Smart Data market, compared to 70 million current accounts and a UK population of 66.4 million people, it’s hard to make the case for overwhelming consumer demand for such services, at a time when some in the industry are calling for ‘Open Everything’ based on this model.</p>
<p>Clearly, then, the UK Smart Data Review makes assumptions about consumer behaviour that may be wrong - errors that are entirely replicable around the world?</p>
<p>However, Smart Data may make the process of engaging with digitally-enabled markets more bearable for those consumers who simply want to get on with their lives. </p>
<p>In the meantime, who will regulate ‘Open Everything’ is, fittingly enough, an open question. And what about the digitally excluded? </p>
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<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - via PIxabay </em>
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Thu, 02 Apr 2020 10:22:35 +0000Chris Middleton22033 at https://diginomica.comSalesforce's CEO double act splits as Block exits and Benioff builds out his top teamhttps://diginomica.com/salesforces-ceo-double-act-splits-block-exits-and-benioff-builds-out-his-top-team
<span class="field field--name-title field--type-string field--label-hidden">Salesforce's CEO double act splits as Block exits and Benioff builds out his top team</span>
<span class="field field--name-uid field--type-entity-reference field--label-hidden"><a title="View user profile." href="https://diginomica.com/author/slauchlan" class="username">Stuart Lauchlan</a></span>
<span class="field field--name-created field--type-created field--label-hidden">Wed, 02/26/2020 - 03:17</span>
<span class="a2a_kit a2a_kit_size_46 addtoany_list" data-a2a-url="https://diginomica.com/salesforces-ceo-double-act-splits-block-exits-and-benioff-builds-out-his-top-team" data-a2a-title="Salesforce's CEO double act splits as Block exits and Benioff builds out his top team"><a class="a2a_button_twitter"></a><a class="a2a_button_facebook"></a><a class="a2a_button_linkedin"></a><a class="a2a_button_reddit"></a><a class="a2a_button_buffer"></a><a class="a2a_button_flipboard"></a></span>
<dl class="node__summary summary">
<dt class="summary__label">Summary: </dt> <dd class="summary__content">
Co-CEO Keith Block steps down, a $1.33 billion buy out of Vlocity and quarterly numbers that deliver a shock loss - a busy day at Salesforce as its 21st birthday looms.
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<img alt="Salesforce co-CEO" src="https://diginomica.com/sites/default/files/styles/article_images_desktop/public/images/2018-08/benioffblock.jpg?itok=Ch3T_dYi" title="Benioff and Block " />
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<figcaption>Benioff and Block</figcaption>
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<p>On an ordinary day, Salesforce splashing out $1.33 billion to buy one of its major ecosystem partners would probably have been the main talking point. But the announcement of <a href="https://contextly.com/redirect/?id=CDoyfd1Vb5:21875:3939:18:RVM=::previous:5e565b325d4d98-37578288">the takeover of Vlocity</a> yesterday was overshadowed by the unexpected stepping down of Keith Block from his role as co-CEO of the CRM firm. </p>
<p>Block, who joined Salesforce from Oracle in 2013, was hailed at that time by co-CEO and founder Marc Benioff as the best enterprise salesperson in the industry. In his initial role at Salesforce, Block set about bringing more focus and structure to the sales teams and accelerating growth at the firm. Latterly as co-CEO, he and Benioff split the management of the company, with Block focusing on the operational aspects.</p>
<p>But now Benioff will reclaim his title as sole CEO of the company he founded 21 years ago as Block sets out on what he called “my next chapter”. He will remain an advisor to Benioff until next February. </p>
<p>The news of Block’s departure came as a shock internally and externally. He and Benioff had formed a strong double-act over the years, <a href="https://diginomica.com/low-key-benioff-kid-block-steps-pitch-wall-street">as diginomica first noted back in 2014</a>. </p>
<p>While Block is certain to be missed, Salesforce has been building out a strong senior executive team in recent years. In light of the news of Block’s exit, the recent promotion of <a href="https://diginomica.com/dreamforce-2018-its-all-about-integration-says-salesforce-product-chief-bret-taylor">Bret Taylor from Chief Product Officer to Chief Operating Officer</a> - a title Block held at one point - can be read with a new significance. And yesterday also saw the formal confirmation of the promotion a couple of weeks ago of Gavin Patterson, former CEO of BT, from his role as Chairman of Salesforce EMEA to CEO of International - basically, he’s going to be running the world outside of the US. </p>
<p>The message to customers going forward is clearly going to be one of missing Block, but pointing to continuity of operations and executive leadership. On the quarterly results conference call last night, Benioff made a point of talking up his team: </p>
<blockquote><p>When I look around this management table here in this room, I'll tell you that I'm also very inspired by our team. Of course, Parker [Harris] who has been by my side for 21 years, could not have done it this without him. We also have our Chief Operating Officer Bret Taylor who many of you know with his tremendous lineage at including Facebook and Google and his own private companies. Our Chief Legal Officer, Amy Weaver who is probably one of the finest executives who I've had the opportunity to work with. And our CFO, Mark Hawkins who just hit me on the side of my shoulder make sure I don't forget about him. </p>
<p>But I also going to mention that there's two people around the management table who are public company CEOs as well who aren't currently with us because they're traveling. One is Adam Selipsky, he is the CEO of Tableau, who is an incredible part of our management team and has provided an unbelievable value in the short time he's been here.</p>
<p>And a new addition who's been with us as our Chairman of Europe but who has now become our President and CEO of International, I could not be more excited to welcome Gavin Patterson who was the Chief Executive Officer of BT, headquartered in London. When you look at our total management team that Keith and I have built together that you have to be awfully proud of this group and I think it is the finest management team in the software technology industry maybe any industry.</p>
</blockquote>
<p>Another significant comment came when Benioff addressed the question of how the transition would be managed. While Block has (rightly) been credited as the ‘super sales guy’ that Salesforce usefully needed, in his role as co-CEO, he’d been lessening the firm’s dependence there. As Benioff noted: </p>
<blockquote><p>I think that Keith would be the first to say that he has built a world-class distribution team that goes across the world. When we promoted Keith to Co-CEO, one of the things that he said to me was he wanted to get out of the business of running the sales force. That's been something that we've worked to do. Through that, we have built an incredible distribution management team with some of the best executives in the world who are go-to-market. And I don't think you're going to find a better team who can execute on that in the same way that we have a great technology team. The other half of any software company is the distribution team. I would give both teams A-plus, and I couldn't be more excited about their capability to go forward and execute our business plan. </p>
</blockquote>
<h2>Oh, and the numbers...</h2>
<p>As for the quarterly numbers - the real business of the day! - they were a mixed bag. For Q4, overall revenue increased 35% year-on-year to $4.85 billion, while full year was up 29% to $17.1 billion. For the full year, the firm turned in a profit of $126 million, but startled Wall Street by turning in a loss of $248 million for the fourth quarter. </p>
<p>Other stats of note: </p>
<ul>
<li>Constant currency growth in Q4 by region - Americas 32%, EMEA 47%, Asia Pacific 28%.</li>
<li>Number of customers spending $20 million annually up 34% year-on-year. </li>
<li>Sales Cloud Q4 revenue up 17% to $1.23 billion. </li>
<li>Service Cloud Q4 revenue up 26% to $1.22 billion. (Excludes ClickSoftware). </li>
<li>Platform and Other revenue up 74% to $1.43 billion. </li>
<li>Marketing and Commerce Cloud up 28% to $0.69 billion. </li>
</ul>
<p>For one last time, Block highlighted some significant wins during the quarter: </p>
<blockquote><p>Volkswagen Group, the number one manufacturer of cars in the world is partnering with Salesforce to transform how they deliver personalized experiences to their dealers, employees and end consumers. Leveraging Salesforce, Volkswagen will have a 360-degree view across their 12 brands. It's pretty incredible. A single source of truth for customer engagement. </p>
<p>Transformation is also one of 3M's top strategic business priorities and over the last several years we've been partnering to transform how they serve their customers. Part of that strategy 3M significantly invested in our Customer 360 solutions in the fourth quarter to increase productivity, drive business growth and enhance the customer experience.</p>
<p>St. James's Place, the UK's largest wealth manager also expands its relationship with Salesforce significantly. SJP is going wall-to-wall with Salesforce leveraging financial services cloud, Einstein Analytics, MuleSoft and more, all to transform how their advisors engage with clients. And many of our existing relationships in Europe deepened as well including with Enel and adidas.</p>
</blockquote>
<p>He picked out some successes from key sectors: </p>
<blockquote><p>In healthcare, Cerner chose Health Cloud to power their client 360 project and they're also partnering with us to sell Salesforce to their healthcare clients. </p>
<p>Financial Services also showed strong momentum in the quarter, longtime customer Farmers Insurance added financial services cloud and Einstein Analytics to empower their agents to deliver even more responsive and personalized experiences to their 15 million policyholders across the United States. We began a new relationship with Canadian Imperial Bank of Commerce, CIBC and expanded with many of the top banks in the US and around the world including Goldman Sachs, Banco Bradesco, Banco Santander and ANZ Bank. Deluxe went wall-to-wall with Salesforce to improve customer insight, ignite innovation and drive toward its goal of selling all products and services to all customers. Deluxe is also partnering with Salesforce to offer Salesforce Essentials.</p>
</blockquote>
<p> With Block credited with building out Salesforce’s vertical go-to-market strategy, that’s as good a note to end on as any other. </p>
<h2>My take</h2>
<blockquote><p>It's not just one person.</p>
</blockquote>
<p>That comment from Block last night is undoubtedly correct. But what’s equally in no doubt is that he is going to be missed. From my own standpoint, I’ve had a lot of interaction with the man over the past few years and <a href="https://diginomica.com/dreamforce-2019-keith-block-and-rise-chief-transformation-officer">always emerged from our meetings with much to think about</a>. What his next chapter will be, I don't know, but will be keen to find out. </p>
<p>The one person who will receive a lot of attention is Benioff himself, now firmly back at the helm. As co-CEO, he'd been freed up to engage with other interests important to him, such as <a href="https://boi.ucsb.edu">the welfare of the oceans</a> and <a href="https://www.nytimes.com/2020/02/12/climate/trump-trees-climate-change.html?emc=rss&partner=rss">the recent initiative to plant a trillion trees</a>. How he strikes a balance comfortable to him and to the company will be interesting to see. </p>
<p>The tone of the analyst call last night was very much about emphasising stability and executive strength. It was interesting to have <a href="https://diginomica.com/dreamforce-history-innovation">co-founder Parker Harris </a>on the call, for example, providing continuity dating back over two decades to Telegraph Hill Boulevard and the founding of the firm. Keep calm and carry on, as the cliche goes. </p>
<p>With the firm’s 21st birthday coming up in early March, the company has raised full year 2021 revenue guidance to $21 billion - 21 for 21 in 21. Achieving that goal will be the task of a revised management team, soon to be joined by David Schmaier of Vlocity. Check out <a href="https://diginomica.com/salesforce-buys-vlocity-13bn-industry-cloud-takeover">Phil Wainewright’s analysis of the importance of the Vlocity acquisition</a>. </p>
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<p class="field field--name-field-image-credit field--type-string field--label-inline">
<em>Image credit - Salesforce </em>
</p>
<p class="field field--name-field-disclosure field--type-string-long field--label-inline">
<em>Disclosure - At time of writing, Salesforce is a premier partner of diginomica. </em>
</p>
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Wed, 26 Feb 2020 11:17:49 +0000Stuart Lauchlan21875 at https://diginomica.com